Thursday, August 2, 2012

Haliburton High Is Coming

Traditionally, public education has been a tough market for private firms to break into -- fraught with politics, tangled in bureaucracy and fragmented into tens of thousands of individual schools and school districts from coast to coast.

Now investors are signaling optimism that a golden moment has arrived. They're pouring private equity and venture capital into scores of companies that aim to profit by taking over broad swaths of public education.

The conference last week at the University Club, billed as a how-to on "private equity investing in for-profit education companies," drew a full house of about 100.

OUTSOURCING BASICS

In the venture capital world, transactions in the K-12 education sector soared to a record $389 million last year, up from $13 million in 2005. That includes major investments from some of the most respected venture capitalists in Silicon Valley, according to GSV Advisors, an investment firm in Chicago that specializes in education.

The goal: an education revolution in which public schools outsource to private vendors such critical tasks as teaching math, educating disabled students, even writing report cards, said Michael Moe, the founder of GSV.

Read the rest to see Daine Ravitch's response. Of course, we now live in a world where it's received wisdom that the profit motive makes everything super duper, even in contradiction to all evidence:

Investors retort that public school districts are compelled to use that metric anyway because of reduced funding from states and the soaring cost of teacher pensions and health benefits. Public schools struggling to balance budgets have fired teachers, slashed course offerings and imposed a long list of fees, charging students to ride the bus, to sing in the chorus, even to take honors English.

The time is ripe, they say, for schools to try something new -- like turning to the private sector for help.

"Education is behind healthcare and other sectors that have utilized outsourcing to become more efficient," private equity investor Larry Shagrin said in the keynote address to the New York conference. [emphasis mine]

They must have been smoking some really strong kush backstage if the keynoter tried to get away with that one. We are the least efficient country in the developed world when it comes to health care, and we get some of the worst results.

How stoned must this Larry Shagrin be to think it's a good argument for privatization to bring this level of inefficiency to our public schools?

The reason school budgets have been cut is because the US is increasingly a highly-unequal, low-tax country that gives huge tax subsidies to the wealthy and corporations.

That will not be fixed by allowing corporate pirates to come into our schools and plunder them for their own profit.

Ravitch asks a question in the article:

"I look around the world and I don't see any country doing this but us," Ravitch said. "Why is that?"